U.S. Economy Shows Signs of Rebound Amid Inflation Battles

The American economy, sustained by robust consumer spending, is expected to have regained momentum in the spring of 2024 after a sluggish start. Despite a likely increase in GDP growth to 1.9%, the economy remains impacted by high borrowing rates induced by the Federal Reserve's rate hikes to curb inflation. While inflation has cooled to 3%, economists remain cautious about the underlying economic health.

The American economy, buoyed by healthy consumer spending, appears to have regained some momentum this spring after a sluggish start to 2024.

The Commerce Department is expected to announce Thursday that the gross domestic product (GDP)—the economy's total output of goods and services—increased at a steady 1.9% annual rate from April through June, an uptick from the 1.4% growth rate in the first quarter, according to FactSet.

Despite this likely improvement, the U.S. economy, the world's largest, has clearly cooled due to the highest borrowing rates in decades. From mid-2022 through the end of 2023, annualized GDP growth surpassed 2% for six straight quarters.